Who Cares About Politics and Soybeans in Argentina? We Should. Here's Why.


owenOwen Roberts is currently in Argentina, attending the IFAJ 2013 Congress. The photo above is courtesy Chuck Zimmerman. View the Flickr account here.

Any export-intensive country for agriculture needs to be constantly tuned into global developments that influence what happens inside our own borders.

Today, the search for those developments takes us to the backroads of Argentina, the country that’s currently hosting the International Federation of Agricultural Journalists’ annual congress.

Argentina has increased its soybean production fourfold in a very short time. That’s made it a dominant player on the world market.

Soybeans are doing well financially, prompting the cash-starved Argentinean government to encourage farmers to grow them with great zeal, get them into global markets and bring money into the country.

But in its usual misguided fashion, the government is burning the candle at both ends. While promoting soybean production, it’s simultaneously taxing farmers heavily with what it calls an “export fee” – a whopping 35 per cent. That’s said to be sucking $40 billion from the farm sector.

Understandably, it’s ticked off a lot of farmers.

The intervention doesn’t stop at soybeans, however. To a lesser degree, the government also dips its fingers into the export sales of other commodities too, with surprising disregard for potential ramifications.

However, the proverbial chickens may be coming home to roost. Some farmers are rallying behind seasoned populist Geronimo “Momo” Venegas, a congressional candidate in the country’s upcoming election. An avowed Peronist, Venegas is stumping everywhere – at a lunch stop for the 200 international agricultural journalists at the congress, for example – damning the government for killing farmers’ incentive. “The government has taken on the rural sector as an enemy,” he told me through an interpreter.

Who knows if he could actually influence the tax, even if he was elected. But imagine the scenarios. Would a farmer-led revolt in the biggest soybean-producing country lead to greater prosperity for producers there, or scare the export market? Could it significantly influence the world price of soybeans?

Whether on the next concession or the next continent, it pays to know what’s going on. Communication is key for a greater understanding of our complex world.

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